AAIS Irrigation Equipment Coverage

AAIS IRRIGATION EQUIPMENT COVERAGE FORM ANALYSIS

(February 2024)

 

Introduction

Eligibility

Policy Construction

IM 7307–Schedule of Coverages–Irrigation Equipment Coverage

IM 7302–Irrigation Equipment Coverage Analysis

   Introduction

   Agreement

   Property Covered

   Property Not Covered

   Coverage Extensions

   Supplemental Coverages

   Perils Covered

   Perils Excluded

   What Must Be Done in Case of Loss

   Valuation

   How Much We Pay

   Loss Payment

   Other Conditions

   Definitions

Endorsements and Schedules

Types of Irrigation Systems

Underwriting Considerations

INTRODUCTION

IM 7302–Irrigation Equipment Coverage Form insures mobile machinery and equipment that are used to irrigate crops. This property has unique characteristics because it may remain in a single field for a season or may be moved regularly to other fields. The equipment is moved from the fields and into storage buildings after its season of use is over, which can result in a significant exposure increase if all equipment is placed in the same storage building. The equipment comes in a variety of sizes, shapes, and forms.

ELIGIBILITY

Any individual or commercial business that owns irrigation equipment or uses irrigation equipment of others but only when it is subject to regular movement and could not be better covered under another coverage form or policy is eligible.

POLICY CONSTRUCTION

AAIS Scheduled Property Floater coverage requires at least these four forms:

Related Article: CL 0100–AAIS Commercial Lines Common Policy Conditions

 

IM 7307–SCHEDULE OF COVERAGES–IRRIGATION EQUIPMENT COVERAGE
(01 12 changes)

This Schedule of Coverages is used with IM 7302–Irrigation Equipment Coverage. IM 7307 contains the following information:

Policy Number (01 12 addition)

The 01 12 edition added a space to enter the policy number.

Covered Property

The Catastrophe Limit is the most paid for loss to irrigation equipment in a single occurrence.

Coverage Extensions

The limit on the Schedule of Coverages for this coverage applies to all covered locations.

The limit is $5,000 unless a different limit is entered.

Supplemental Coverages

These coverages provide additional limits of coverage or additional coverage. Required entries vary by type of coverage.

The limit is $5,000 unless a different limit is entered.

The limit is $10,000 unless a different limit is entered.

Deductible

The deductible amount must be entered in the space provided.

Coinsurance

One of the following coinsurance options must be selected:

Additional Information (01 12 change)

This section of the schedule of coverages lists endorsements and forms included when the policy is issued.

The previous edition referred to this section as Optional Coverages and Endorsements.

IM 7302–IRRIGATION EQUIPMENT COVERAGE FORM ANALYSIS

This analysis is of the 10 09 edition.

Introduction

The terms "you" and "your" are defined as the party(ies) that is identified on the declarations as the insured. "We," "us," and "our" are defined as the insurance company that provides the coverage. Other terms throughout this policy and coverage form have unique definitions. It is important to refer to the Definitions Sections at the end of the coverage form to review those unique meanings.

Agreement

The insurance company agrees to provide the coverage described in the coverage form and in the schedule of coverages and the named insured agrees to pay the premium. This agreement between the parties is subject to all the coverage form's terms, conditions, endorsements, and definitions.

Property Covered

Coverage applies to the property described below, subject to any exclusions or limitations.

1. Coverage

Covered property is the named insured's irrigation equipment and it is covered for direct physical loss by a covered peril. Similar irrigation equipment of others in the named insured’s care, custody, and control is covered in the same manner.

2. Coverage Limitation

For equipment to be covered, it must be described on the equipment schedule. This limitation applies to both the named insured’s equipment and the property of others.

Note: Irrigation equipment coverage is usually based on the value or limit of each scheduled item. This may not be practical in every case, especially when the named insured has a large number of insurable items. Some insurance companies may consider writing this coverage on a blanket limit basis, describe in general the type of irrigation equipment being insured, and declare a maximum limit for each item in addition to the catastrophe limit that applies in a single occurrence.

Property Not Covered

Six specific types of property are excluded:

1. Aircraft or Watercraft

This property is more correctly insured under aircraft and watercraft coverage forms and policies. It is important to remember that Unmanned Aerial Vehicles (UAV) or drones are aircraft and therefore not covered.

2. Contraband

Property that is illegal to possess is not covered. Property that is legal to possess, but that is being used as part of an illegal trade or transported illegally, is also not covered.

3. Leased or Rented Property

Property that the named insured leases or rents to others is not covered.

Note: This property is better covered under an equipment sales and rental coverage form designed for the lack of control that can occur with rented or leased property.

4. Loaned property

When property is loaned to others, problems can occur due to a lack of control and knowledge of the equipment. This does not stop the named insured from taking its equipment and being in control of it at another site. The important issue is who is in control and monitoring the equipment.

5. Vehicles

Automobiles, other self-propelled vehicles, trailers, and similar conveyances intended for use on highways are not covered.

Note: This property is more correctly insured under commercial automobile coverage forms.

Related Article: CA 00 01–Business Auto Coverage Form Analysis

6. Waterborne Property

When irrigation is waterborne it is not covered unless it is in transit while in a carrier for hire's care, custody, or control.

Coverage Extensions

Provisions That Apply To Coverage Extensions

There is one coverage extension. Its limit is either the limit on the schedule of coverages or the default limit included in the coverage form. This limit is part of the applicable limit for covered property and not in addition to it unless otherwise indicated. This limit is not added to or combined with limits for any other coverage extension or supplemental coverage and is not subject to any coinsurance provisions that apply elsewhere in the coverage form.

Debris Removal

When a covered peril damages or destroys covered property, the cost to remove any created debris is covered under this extension.

Debris removal does not include any costs for removing, restoring, replacing polluted land or water or to extract pollutants.

There are two parts of the Limit section. The first is restricting any debris removal payment to no more than 25% of the amount paid for the actual direct physical loss or damage. The second part is that when the debris removal and the physical damage loss are added together, no more than the limit of insurance is paid.

An additional $5,000 (or a higher amount entered on the schedule of coverages) is available if the debris removal expense is more than 25% of the loss amount or if the combined cost of loss and debris removal is more than the limit of insurance for the covered property.

The named insured must report debris removal expenses to the insurance company within 180 days of the loss date in order for this coverage extension to apply.

Supplemental Coverages

Provisions That Apply To Supplemental Coverages

There are three supplemental coverages. The limit for each is the limit for the supplemental coverage unless there is a limit for that coverage on the schedule of coverages. Limits for any supplemental coverage are separate from and not part of the applicable limit for covered property.

The limit available for coverage described under a supplemental coverage is the only limit available for it. It is not the total of the limit for a supplemental coverage and the limit for covered property. The limits are not added to or combined with limits for any other supplemental coverage or coverage extension. They also are not subject to any coinsurance provisions that apply elsewhere in the coverage form.

1. Newly Acquired Property

a. Direct physical loss or damage to irrigation equipment the named insured acquires during the policy period is covered when caused by a covered peril.

There are restrictions. The most paid is the lesser of the covered property’s value as explained in the Valuation section or $5,000.

The coverage applies for only 30 days following the date of acquisition; this is further modified to state that regardless of the 30 days, the coverage ends when the equipment is reported by the named insured or when the policy expires, whichever comes first.

Additional premium is due as of the acquisition date.

Example: Vern's Irrigation Service owns a wide variety of irrigation equipment. One of his competitors decides to retire and offers Vern his remaining stock of irrigation equipment after having divested himself of most of it over the past year. Vern likes what he sees, offers twenty-five cents on the dollar of their value, and the competitor accepts the offer. Vern plans to pick up the equipment in about two weeks and decides to wait until then to report the acquisition to his insurance agent so he can inventory it and provide an accurate list to his agent. Until then, this supplemental coverage insures this property.

2. Pollutant Cleanup and Removal

The named insured's expenses to extract pollutants from land or water are covered if a covered peril that occurred during the policy period in any way caused their release or discharge. However, there are significant restrictions.

The expenses must be reported to the insurance company within 180 days of the date of loss.

Testing for, evaluating, observing, or recording pollutants costs are excluded except for those required as part of a covered pollutant extraction process.

A 12-month policy period aggregate limit of $10,000 applies. This limit can be increased.

Example: Vern is pulling a piece of irrigation equipment when it detaches and tumbles down a slope into a small pond. The equipment had a trace amount of chemicals that had to be removed from the pond. This additional coverage pays its $10,000 limit, and Vern pays the remaining cost.

Perils Covered

Coverage applies to risks of direct physical loss or damage unless the loss is limited or caused by an excluded peril.

Perils Excluded

1. Primary Exclusions

The first group of exclusions is essentially absolute. Subject to specific exceptions, loss or damage by each is totally excluded, regardless of any other cause or event that contributes to a loss, either concurrently or in any other sequence. The insurance company does not pay for any direct or indirect loss or damage caused by or that results from any of these events.

a. Civil Authority

There is no coverage for a loss that results from an order any civil or government authority issues. These orders may include seizure, confiscation, destruction, or quarantine of property, but this exclusion is not limited to only these. The only exception is when the loss or damage is caused by a civil authority destroying property to control a fire. This exception applies only if the fire results from a covered peril.

 b. Nuclear Hazard

The insurance company does not cover loss or damage caused by or resulting from any nuclear reaction, radiation, or contamination. This is absolute and applies whether or not the nuclear incident was controlled and by whatever means caused. Any loss the nuclear hazard causes is not treated as a loss that fire, explosion, or smoke causes. The only exception is when a fire results from the nuclear fire. Direct loss or damage from that fire is covered, but the damage from the nuclear hazard remains excluded.

 c. War and Military Action

The insurance company does not pay for loss or damage caused by any act of war. Undeclared and civil war or warlike action by a military force are all considered war. All actions taken to hinder or defend against an actual or expected attack by any government or sovereign authority that uses military personnel or other agents are also considered war and excluded. In addition, acts of insurrection, rebellion, revolution, or unlawful seizure of power and any action any government authority takes to prevent or defend against any such acts are excluded. If any action within the terms of this exclusion involves nuclear reaction, radiation, or contamination, this exclusion applies in place of the nuclear hazard exclusion.

Note: This means that the exception for resulting fire under the nuclear hazard is not covered when it results from war.

2. Secondary Exclusions

The second group of exclusions applies to loss or damage caused by or resulting from any of the following loss events. Some of these exclusions have exceptions, conditions, or limitations that should be noted and reviewed carefully. The insurance company does not pay for any loss or damage caused by or that results from any of these events.

a. Contamination or Deterioration

Loss or damage that is caused by contamination or deterioration is excluded. This applies to corrosion, decay, fungus, mildew, mold, rot, and rust. It also applies to any quality, fault, or weakness in covered property that causes it to damage or destroy itself. However, this exclusion is not limited to only these described causes.

b. Criminal, Fraudulent, Dishonest, or Illegal Acts

Coverage does not apply to loss caused by, or that results from criminal, fraudulent, dishonest, or illegal acts that any of the following commit alone or in collusion with another:

Coverage applies if employees destroy property. It does not apply if employees steal.

This exclusion does not apply to covered property in the custody of carriers for hire.

Coverage for this exposure should be purchased using a commercial crime coverage form.

Related Article: ISO Commercial Crime Coverage Forms and Policies Analysis

c. Freezing

Loss or damage caused by or that results from freezing is excluded. If pipes burst because of freezing, the damage to the pipes and the damage resulting from the burst pipes is also excluded.

Example: John told his son to drain all liquid from the irrigation equipment before storing it. The son is distracted because of an upcoming date and forgets to complete the draining task. In the spring, when the equipment is being readied for the season, John notices cracks in one piece of equipment and also notices damage to equipment around it due to the leaking of the pipe. All of the damage is excluded.

d. Loss of Use

There is no coverage for loss caused by or resulting from delay, loss of use, or loss of market.

Example: The damage from the equipment freezing is going to delay John getting his equipment out for at least two weeks. There is no coverage for that delay time, even if freezing had been covered.

e. Mechanical Breakdown

When mechanical, structural, or electrical breakdown or malfunction causes a loss, it is excluded. The loss is excluded even if a breakdown results from a structural, mechanical, or reconditioning process. However, if a specified peril occurs due to any of these, coverage applies to the loss or damage that the specified peril causes.

f. Missing Property

The unexplained or mysterious disappearance of covered property is excluded when there is no physical evidence to suggest what happened to it, and the only proof that a loss occurred is based on an audit or physical inventory. The one exception is that this does not apply to covered property in the custody of carriers for hire.

g. Pollutants

There is no coverage for loss caused by or resulting from any release, discharge, seepage, migration, dispersal, or escape of pollutants. There are three exceptions:

h. Temperature/Humidity

Coverage does not apply to loss that dryness, dampness, humidity, changes in, or extremes of temperature causes. There is an exception. If a specified peril occurs due to any of these, coverage applies to the loss or damage that the specified peril causes.

i. Voluntary Parting

Loss to covered property voluntarily given to others is not covered, even if the surrender was due to a fraudulent scheme, trick, or false pretense.

j. Wear and Tear

Loss caused by wear, tear, marring, or scratching is excluded. There is an exception. If a specified peril occurs due to any of these, coverage applies to the loss or damage that the specified peril causes.

What Must Be Done In Case Of Loss

1. Notice

The named insured must promptly notify the insurance company or its agent of a loss. The notice must include a description of the property lost or damaged. If a criminal act caused the loss, the appropriate law enforcement agency must also be notified. The insurance company has the right to require that any notice to it be in writing.

2. You Must Protect Property

During and after a loss, the named insured must take all reasonable steps to protect covered property from further loss. The insurance company pays reasonable costs the named insured incurs, but to do so, the named insured must maintain accurate records to substantiate the costs. Paying these costs is not in addition to the policy limits. There is no coverage for any repairs or emergency measures performed on property not already damaged by a covered peril.

Note: Such costs incurred reduce the amount available to pay the actual loss.

3. Proof of Loss

The named insured must complete and return the insurance company's prescribed proof of loss forms within 60 days after the company requests it. The information provided must include the time, place, and circumstances involved with the loss and information on any other insurance coverage that may apply. It must also include the named insured’s interest and the interest of others with respect to the property involved, including lienholders, loss payees, and mortgagees. Any changes in the title to the property during the policy period must be disclosed, in addition to providing any other reasonable information the company may require to adjust and settle the loss.

4. Examination

Examination under oath may be required in matters that relate to the loss. The insurance company may request these examinations more than once, but such requests must be reasonable. If multiple persons are examined, the company has the right to examine each individual separately.

5. Records

The named insured must produce any records related to the loss. The insurance company must be allowed to make copies and take extracts of them as often as it reasonably requests. Records include tax returns and bank microfilms of all related cancelled checks, but records are not limited to just these.

6. Damaged Property

Damaged and undamaged property must be made available for the insurance company's inspection as often as reasonably necessary. It must also be allowed to take samples of the property to the extent necessary to adjust and settle the loss.

7. Volunteer Payments

The named insured may not voluntarily make payments, assume obligations, pay or offer rewards, or incur other expenses without the insurance company's express approval. If it does, it does so at its own expense. The only exceptions are those costs incurred to protect property, as item 2. above describes.

8. Abandonment

The named insured may not abandon damaged property to the insurance company without its written consent.

9. Cooperation

The named insured must cooperate with the insurance company and perform all acts this coverage form requires.

Valuation

1. Actual Cash Value

The value of the covered property is its actual cash value at the time of loss. Actual cash is replacement cost new minus depreciation.

2. Pair or Set

The value of a loss that involves damage to or loss of one part of a pair or set is based on a reasonable proportion of the value of the entire pair or set. However, the loss of one part of a pair or set is not considered a total loss.

Note: This recognizes that the value of the whole is greater than the value of individual parts but that the remaining parts still have value as separates.

3. Loss to Parts

The value of a lost or damaged part of the property that consists of several parts is the cost to repair or replace only the lost or damaged part.

How Much We Pay

1. Insurable Interest

The insurance company does not pay more than the named insured's insurable interest in the covered property at the time of loss.

Note: Insurance is meant to restore a person’s pre-loss financial position, not to improve or enhance it.

2. Deductible

The insurance company pays only the amount of loss that exceeds the deductible amount on the schedule of coverages. This is an occurrence deductible.

3. Loss Settlement Terms

Subject to the other items in this section, the insurance company pays the least of the following:

4. Coinsurance

a. When coinsurance applies to a coverage provided, the insurance company pays only part of the loss if the limit is less than the percentage of the value of the covered property on the schedule of coverages.

b. The following are the three steps to determine the amount of loss to be paid:

Step 1. Multiply the percentage on the schedule of coverages by the covered property’s value at the time of loss.

Step 2. Divide the covered property’s limit by the result determined in Step 1.

Note: There is no coinsurance penalty if the result is 1.00 or higher.

Step 3. There is a coinsurance penalty when Step 2. is less than 1.00. Subtract the deductible from the amount of loss and then multiply the total amount of loss by the percentage determined in Step 2.

The insurance company does not pay more than the amount determined in Step 3. or the limit, whichever is less. It does not pay any remaining part of the loss.

c. If there is more than one limit on the schedule of coverages, this procedure applies separately to each limit.

d. If there is only one limit on the schedule of coverages, this procedure applies to the total of all covered property insured under that limit.

e. This coinsurance provision does not apply unless a coinsurance percentage is entered on the schedule of coverages.

5. Insurance under More Than One Coverage

Two or more coverages in the coverage form may apply to the same loss. In that case, the insurance company does not pay more than the value of the actual claim, loss, or damage sustained.

6. Insurance under More Than One Policy

a. Proportional Share

The named insured may have other coverage subject to the same terms as this coverage form. In that case, this coverage form pays only its share of the covered loss. That share is the proportion that its limit of insurance bears to the limits of insurance of all insurance that covers on the same basis.

b. Excess Amount

There may be other coverage available to pay for the loss other than as described in 7. a. above. In that case, this coverage form pays on an excess basis. It pays only the amount of covered loss that exceeds the amount due from the other coverage, whether collectible or not. Any payment is subject to the limit of insurance that applies.

Loss Payment

1. Loss Payment Options

a. Our Options

The insurance company has the following four loss payment options if a covered loss occurs.

b. Notice of Our Intent to Rebuild, Repair, or Replace

The insurance company must notify the named insured of its intent to rebuild, repair, or replace within 30 days after receiving a properly completed proof of loss.

2. Your Losses

a. Adjustment and Payment of Loss

The insurance company adjusts all losses with and pays the named insured unless another loss payee named in the policy is involved.

b. Conditions for Payment of Loss

The insurance company pays a covered loss within 30 days after it receives a properly prepared proof of loss and the amount of loss is established. The amount of loss is determined by either a written agreement between the company and the named insured or after an appraisal award is filed with the company.

3. Property of Others

a. Adjustment and Payment of Loss to Property of Others

The insurance company has the option to adjust and pay losses that involve property of others either to the named insured acting on the property owner’s behalf or to the property owner.

b. We Do Not Have to Pay You if We Pay the Owner

The insurance company is not obligated to pay the named insured when it pays the property owner. In addition, if the property owner sues the named insured, the company has the option to defend the named insured in that suit.

Other Conditions

1. Appraisal

The insurance company and the insured may not always agree on the value of a covered claim. This condition provides one method to resolve disputed claims.

Either party can request an appraisal to determine the value of a disputed claim. Once requested, the parties have 20 days to obtain their own independent and competent appraisers and give their appraiser's name to the other party. The two appraisers then have 15 days to select a competent impartial umpire. If they cannot agree on an umpire within that time period, either can request that a judge in the court of record in the state where the property is located appoint one.

The appraisers then determine the claim’s value. They submit any differences to the umpire. Once any two of the three parties agree, the amount of loss is set.

Each party pays its own appraiser. Both parties share the umpire’s cost and other expenses equally.

2. Benefit to Others

The insurance provided does not directly or indirectly benefit any party with custody of the named insured's property.

3. Conformity with Statute

Any condition in this coverage form that conflicts with any applicable law is amended to conform to that law.

4. Estates

Note: This condition applies only if the named insured is an individual.

a. Your Death

If the named insured dies, the person who has custody of the named insured's property is an insured until a qualified legal representative is appointed. The named insured’s legal representative becomes an insured once he or she is appointed. Both are insureds, but only with respect to the property this coverage form insures.

b. Policy Period is not Extended

This coverage does not extend past the policy’s expiration date.

5. Misrepresentation, Concealment, or Fraud

This coverage is void if any insured at any time willfully concealed or misrepresented a material fact related to the insurance provided, the property covered, or its interest in the property. It is also void if fraud or false swearing by any insured took place concerning the insurance provided or the property covered.

Note: The named insured must deal with the insurance company honestly. Its rights of recovery may be voided if it intentionally misrepresents or conceals a material fact or information. This means the insurance is treated as simply having never existed versus denying a particular claim.

6. Policy Period

Only covered losses that occur during the policy period are paid.

7. Recoveries

Paying the loss does not end the obligations of the named insured and the insurance company toward one another. Additional provisions apply if the insurance company pays a loss and the lost or damaged property is subsequently recovered, or the parties responsible for the loss pay for it.

Either party that recovers property or payment must inform the other. Recovery expenses that either party incurred are reimbursed first. If the named insured keeps the recovered property, it must refund the amount of the claim the insurance company paid unless the company agrees to a different amount. If the claim paid is less than the agreed loss due to applying a deductible or another limitation, any recovery is prorated between the named insured and the insurance company based on the company's respective interest in the loss.

8. Restoration of Limits

Payment of a claim does not reduce the limit available for future claims unless it is a total loss of a scheduled item. In that case, the insurance company refunds any unearned premium on that item to the named insured.

9. Subrogation

The insurance company acquires the named insured's rights of recovery from third parties after it pays a loss. The named insured must help the insurance company secure those rights. The company is not obligated to pay a loss if the named insured hinders or impairs the company's rights of subrogation. However, the named insured can agree in writing to waive recovery rights from others before a loss occurs.

10. Suit against Us

The insurance company cannot be sued by anyone for any coverage until all the terms of the coverage form are met. Suits must be brought within two years after the named insured first knew about a loss. If a state law invalidates this condition, any suit brought must comply with the provisions of that law and begin within the shortest period of time allowed by law.

Note: It is normal for a basic coverage form to be modified by mandatory state-specific endorsements that address issues that relate to that specific state.

11. Territorial Limits

Covered property must be located in the United States, its territories and possessions, Canada, or Puerto Rico for coverage to apply.

Definitions

Defined terms are used throughout the coverage form. Restricting their meaning to their definition is how all parties have a clearer understanding of the intended coverage. Nine terms are defined:

1. Equipment schedule

This is a list and description of each item of covered equipment. It is attached to and becomes a part of the coverage form.

2. Irrigation equipment

This is mobile machinery and equipment the named insured uses to irrigate crops. It also includes pumps and attached pipes but is not limited to just these.

3. Limit

This is the amount of coverage that applies to the insured property.

4. Pollutant

This is a broad and expansive term. It is solids, liquids, thermal or radioactive contaminants, and irritants. It includes, but is not limited to, acids, alkalis, chemicals, fumes, smoke, soot, vapor, and waste. Waste includes materials intended for recycling, reclamation, and reconditioning, as well as for disposal. Visible and invisible electrical or magnetic emissions and sound emissions are also considered pollutants.

5. Schedule of coverages

This is any page labeled as such that contains coverage information, including declarations or supplemental declarations.

6. Sinkhole collapse

This is the earth’s surface suddenly settling or collapsing into an underground opening created by water that acts on limestone or some other rock formation. Sinkhole collapse does not include the land’s value or the cost to fill sinkholes.

7. Specified perils

These are the named perils of aircraft, civil commotion, explosion, falling objects, fire, hail, fire extinguishing equipment leakage, lightning, riot, sinkhole collapse, smoke, sonic boom, vandalism, vehicles, volcanic action, water damage, the weight of sleet, snow or ice and windstorm. Two terms need further explanation.

Falling objects do not include loss to personal property stored in the open. It also does not include damage to the interior of buildings or personal property stored in buildings unless a falling object first breaches the building's exterior.

Water damage is the sudden or accidental discharge or leakage of water or steam. However, it must be a direct result of a part of the system or appliance that holds the water or steam cracking or breaking.

8. Terms

These are all provisions, limitations, exclusions, conditions, and definitions that apply to this coverage.

9. Volcanic action

An airborne volcanic blast or shock waves, ash, dust, and particulate matter. However, the cost to remove dust, ash, or particulate matter that does not directly damage covered property is not covered. Lava flow is also volcanic action.

ENDORSEMENTS AND SCHEDULES

AAIS has developed the following schedule for use with this coverage form:

IM 7310–Irrigation Equipment Schedule

This schedule is used with IM 7302–Irrigation Equipment Coverage and IM 7307–Schedule of Coverages–Irrigation Equipment Coverage. It lists and describes each item of covered irrigation equipment. A limit of insurance must be entered for each item.

Note: Additional company specific endorsements may be available and used. Each should be examined to determine its effect on coverage, especially when some may impose restrictions or controls that may be minimum requirements or prerequisites for the company to provide coverage or to accept a particular exposure.

TYPES OF IRRIGATION SYSTEMS

Irrigation is artificially applying water to soil to enhance the growth of crops. It is mostly used in dry areas and during periods of low rainfall, but it has other limited applications, such as to protect plants against frost.

There are various types of irrigation techniques. The primary difference between them is in how they obtain and distribute water within the field. The primary goal is to supply water uniformly so that each plant has the proper amount of water it needs.

Manual irrigation is the watering of the land with a watering can using only manual labor.

Surface irrigation systems use gravity to move the water over the land and saturate the soil. This is the most frequently used method to irrigate agricultural land.

Localized irrigation distributes water under low pressure through a piped network in a predetermined pattern and applies a small amount to or near each plant. Some of the types are listed below:

UNDERWRITING CONSIDERATIONS

Equipment may be at a storage location, in transit, or in the field working. Each aspect has its own exposure risks that must be explored and underwritten.

Storage Location

The major concern with equipment in storage is a concentration of values, amount of surveillance, and activities such as welding and repair that may take place while the equipment is in storage. The equipment may be overwintered at a central location that may be visited on an infrequent basis. It is important to know the total value of all equipment stored at a single location. It is important to apply commercial property underwriting guidelines at any storage location.

Related Article: Commercial Property Underwriting Considerations

In Transit

The major concern when equipment is in transit is the radius of operations, the types of roads the equipment is used on, and the ability of the operator to move the equipment because overturn and collision damage are major exposures. As with other types of automobile and transit policies, the operator's experience is paramount. It is important that only experienced drivers with acceptable MVRs be permitted to transport the equipment.

In the field

The major exposures when equipment is in the field are theft, overturn, and vandalism. As a result, the length of time the equipment remains in a particular field is important, along with surveillance of the equipment while it is at the location.

The equipment must be evaluated based on age, condition, damageability, size, and value. There are a number of perils that should be considered:

Accurate loss information is very important in the evaluation. If there is loss frequency, higher deductibles may encourage a named insured to become more vigilant in loss prevention.